As noted above by RSH, it seems imgur.com has recently switched to API version 3 for direct image uploads.

Consequently, applications designed for the direct upload of images must comply with the more exacting specifications of the OAuth 2.0 protocol for authorization and authentication (password and token generation).

For now, the Imgur hosting option of PupSnap-2.0 is nonfunctional, and may be removed in future releases.

PupSnap-2.1
- Restored functionality of the Image Host module by adding compatibility with the new Imgur API 3.

Code:

Notes for the Image Host module:

PupSnap is registered as a non-commercial application with imgur.com, in accordance with API version 3.
As noted in the Imgur FAQ: "The Imgur API uses a credit allocation system to ensure fair distribution of capacity.
Each application can allow approximately 1,250 uploads per day or approximately 12,500 requests per day."

Please go to http://api.imgur.com/#limits and http://api.imgur.com/errorhandling for additional information.

Furthermore, according to the online FAQ, the API indicates each client application must comply with OAuth 2 authentication, which requires additional registration and compliance restrictions.

Overall, registration for API 3 is certainly more involved than registration for the old API 2.

According to the Imgur FAQ, the API 3 is free for non-commercial usage and each client application can allow approximately 1,250 uploads per day. If the daily limit is hit five times in a month, then the application will be blocked for the rest of the month. This should be no problem for PupSnap which has a small usage base, but it could be an issue for popular applications that have heavy upload usage. In such cases, if your (non-commerical) application becomes rate limited, you can contact Imgur and request a white-list status which (if approved) will remove rate limits for your application.

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